Chinese stock gains, driven by a tech frenzy, are having little effect on other emerging markets.
China’s Stock Rally and Its Unique Features
Analysts claim that the rally in Chinese stocks has been driven by ongoing tech buzz rather than economic improvement. Starting from January, when Deepseek was launched, China's stock market has been on the rise, backed by the tech sector.
Historical Comparisons with Past Surges
Since August 2024, the MSCI China Index has increased by over 30%, while emerging markets outside China declined by 7%. Unlike previous years — 2009-2010 and 2016-2017 — when both China and other emerging markets saw positive trends, the current situation differs.
Expert Predictions
Vincenzo Vedda from DWS International believes China's stock outperformance over others may continue, but the U.S. tariff hikes pose a potential threat. Some investment funds have already started reducing their exposure to Chinese stocks.
Although the tech boom keeps propelling Chinese stocks upward, its effect on other emerging markets remains limited. The anticipation of potential tariff barriers makes the future of China's market less predictable.
